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Debt Agreement ???

Discussion in 'Finance & Banking' started by zengin, 15th May, 2010.

  1. zengin

    zengin Member

    Joined:
    16th Jan, 2008
    Posts:
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    Location:
    Melbourne
    Hi Everyone

    I have financial difficulty to repay all my unsecured debts and I dont really want to go bankcrupt so I have spoken to a firm about it and they advice I should go for debt agreement . My concern is that if this is the best way to go ? I have around $ 50.000 in unsecured debt and home loan of $ 236.000 my house is worth about $260.000 ( according to agents ??) my weekly income is between $800 to $ 900 after tax .

    What is your opinion

    Thanks in advance

    Sam
     
  2. johnluo721

    johnluo721 Active Member

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    Location:
    sydney
    Most Bank have financial hardship assist program, which allowed you to make a deal with bank. However, you need to qualify some conditions before you can apply, some of them are very stupid(you need to miss at least one repayment, lost you income etc). But I dont know too much detail about it, you may need to speak to your bank. I had a customer who owe around $30,000 card debt, and made a deal with bank for around $20,000.
     
  3. zengin

    zengin Member

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    Location:
    Melbourne
    Thanks for your reply johnluo721

    I still have my job and my credit problems are with few different banks so
    it makes it bit hard but I know where you coming from thanks again

    Zengin
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    A debt agreement may be the best outcome for everyone. From what you have described, if they were to force you into bankruptcy, they won't get anywhere near the full amount back, so they may get a better result if they came to a negotiated outcome with you.

    It is a bit more complicated if there are multiple banks involved - but you should try and negotiate if possible. It doesn't sound like you have a lot of flexibility though.

    Better to start the ball rolling yourself than waiting for the banks to refer the debts to debt-collection agencies.
     
  5. zengin

    zengin Member

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    Location:
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    Thanks Sim

    What about Re mortgage refinance , is that not a option ? in my case .

    After reading the pdf on debt agreement it says that for any reason that they cant get me the debt consolidation I would still have to pay them their fee of $3900 ( I think that's the right figure ) which I dont have and this is where I am also worried.

    I like to know if I can still apply for a home loan ( investment ) or a car loan before I have paid all the debt ( if my financials change mean time )

    Thanks
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    If you can't pay your debts now, do you really think you would be able to pay off a larger house loan?

    I'm not sure if the bank would want to take on the extra risk if you are already over-extended anyway. You could always try though!
     
  7. zengin

    zengin Member

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    Melbourne
    Sorry Sim I did not explain my self proper.

    I am told that my credit will be " bad " for the next 7 years even if the debt is paid off so my question was in that time would I be able to get home loans or a car loan , because I cant get credit cards at that time period .

    The person I spoke to believes I can apply for home or car loan but not a credit card so I am just checking to see what kind a experience other people have had or if there is any mortgage brokers out there that can give an answer from their point .

    Thanks again
     
  8. GregR

    GregR Reid Consultants

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    13th Jul, 2009
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    Location:
    Berwick Vic
    Sam,
    Based on what you have said, you are already at a 90% LVR with your home. There are not many lenders who will refinance above that. Add in another $50k and you are wanting to refinance to 110%.
    It is highly unlikely you will find a lender who will do this just based on that security.

    As to the actual method of a debt agreement, if it takes you into bankruptcy, it will show on your credit file for 7 years. That does not mean you will not be able to borrow, it may mean you will pay a higher risk rate for the next three years perhaps but I still have lenders approving loans for discharge bankrupts.

    Talk to a few debt mediators as there may be better options that bankruptcy whatever term they call it.
    Good luck.
    Greg
     
  9. zengin

    zengin Member

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    16th Jan, 2008
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    Location:
    Melbourne
    Thanks Reid

    I wont be going Bankcrupt just getting a debt agreement with the banks etc . I am taliking to few of them now just so that I can get the full picture .

    It will take me 5 years to pay it off and it will be under part 10 insolvency agreement if that makes any sense to you because it is all new to me .They will go for 50% repayment .

    Thanks again mate

    Zengin